17th March 2017

V.Kosek, Johnson & Johnson on public procurement: Who will be the first one courageous enough to use the „willingness to pay for better quality“ model?

"How do you buy things? Do you always buy the cheapest product?  For example when you decide to purchase a TV, do you say: 1 TV please? Or do you go through specifications and seek for good quality for reasonable price? Our personal purchases are often very logic and we do that without thinking.  We understand that  incremental improvement is bond to premium price. However, many times we do not see this logic in tenders prepared by public sector. Very often we can see the only criteria to be  THE PRICE.
 
The new public tenders law  (effective October 2016) does not strictly determine, which model should be used for tender evaluation, and therefore there is a chance to use monetary model,  simulating the example above. You just deduct money (=no percentages are used) for added features and services offered by the provider. These features and services must have sense for the buyer and should be specified in tender documentation up front. It is very easy to gain general agreement and acceptance of this  „willingness to pay for better quality“ from non-clinical and also clinical decision makers. But the question still remains: Who will be  the first one courageous enough to use such model?"
 

Click on presentations from the AmCham CZ event HOW CAN IMPLEMENTATION OF MEAT QUALITY CRITERIA INCREASE THE EFFICIENCY OF HOSPITALS 

 

Infographics:

Public procurement in health care: The Ministry of Healthcare monitored procurements between January 2014 and June 2015. The number of procurements: over 8,000, expected costs: 13.4bn Kc, real costs: 11.8bn Kc, savings: 12%. The greatest part of savings was recorded in the category of  under the threshold procurements (see the graph). Source

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Read also about the finding of the NGO Oživení and the think-tank EconLab on ineffective purchases of medicaments by hospitals (in Czech). Rankings of hospitals (patients' and employees' view, financial health, management, regional comparison) by Health Care Institute HCI are available here (in Czech).

Members of the American Chamber of Commerce in the Czech Republic